The average annual marginal generation cost approximates the wholesale price of energy in ERCOT

<p><strong>Figure 3.</strong> The average annual marginal generation cost approximates the wholesale price of energy in ERCOT. The CO<sub>2</sub> penalty of 60$/tCO<sub>2</sub>, held at constant real value for each year in scenarios 2 and 4, raises the marginal cost of electricity by 30–35$ MWh<sup>−1</sup> (approximately the emissions cost from natural gas generation). The CO<sub>2</sub> sales price scenarios have approximately the same marginal cost as if there were no coal-fired power plants with CO<sub>2</sub> capture.</p> <p><strong>Abstract</strong></p> <p>This letter compares several bounding cases for understanding the economic viability of capturing large quantities of anthropogenic CO<sub>2</sub> from coal-fired power generators within the Electric Reliability Council of Texas electric grid and using it for pure CO<sub>2</sub> enhanced oil recovery (EOR) in the onshore coastal region of Texas along the Gulf of Mexico. All captured CO<sub>2</sub> in excess of that needed for EOR is sequestered in saline formations at the same geographic locations as the oil reservoirs but at a different depth. We analyze the extraction of oil from the same set of ten reservoirs within 20- and five-year time frames to describe how the scale of the carbon dioxide capture, utilization, and storage (CCUS) network changes to meet the rate of CO<sub>2</sub> demand for oil recovery. Our analysis shows that there is a negative system-wide net present value (NPV) for all modeled scenarios. The system comes close to breakeven economics when capturing CO<sub>2</sub> from three coal-fired power plants to produce oil via CO<sub>2</sub>-EOR over 20 years and assuming no CO<sub>2</sub> emissions penalty. The NPV drops when we consider a larger network to produce oil more quickly (21 coal-fired generators with CO<sub>2</sub> capture to produce 80% of the oil within five years). Upon applying a CO<sub>2</sub> emissions penalty of 60$2009/tCO<sub>2</sub> to fossil fuel emissions to ensure that coal-fired power plants with CO<sub>2</sub> capture remain in baseload operation, the system economics drop significantly. We show near profitability for the cash flow of the EOR operations only; however, this situation requires relatively cheap electricity prices during operation.</p>